Tuesday, July 27, 2010

Bookkeeping: Short Energizer (ENR)

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Overall market view - this was a much needed pullback.  Commodities are being bum rushed as student body left turns into student body right.  U.S. Steel (X) - which is U.S. and European based - NOT Asia is showing the danger of the earnings reports in the coming 2 weeks; companies much more focused on America rather than Asia.  If we close above S&P 1113 today will have been a very excellent day of consolidation for bulls, and any closes over 1100 still call for 'buying on dips'.

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That said, on the bear side one of my old legacy limit short orders hit today - just noticed.  It was short Energizer (ENR)... and it seems earnings have driven the stock up... way up!  Normally when a stock moves up like this on news to trigger a short that was based on technicals, I'd immediately sell the position (even if at a small loss) since my reason for the short sales are not the reason the price triggered, but since I have a decent entry price I will keep it on and see if the stock struggles in the next day or two.  I'd be giddy (and lucky) if the gap down in the $55s filled.

My short entry was $59.99; obviously that was not where the order was placed but the stock gapped up off earnings and has been going sideways all day.  I'll give this a just over 3% stop loss at $62.  Again this is not something I'd walk in today if presented the chart and short, but since we have it on - let's give it a whirl with a very tight stop. Just over $62 we'll exit.  (we have about a 2.2% exposure)



I'm off to research how much of ENR's sales are from overseas!
  • Q3 revenue was up 8% at $1.076 billion, slightly exceeding the $1.07 billion expected. Profit per share of $1.35, excluding a couple of one-time tax gains, was 39 cents ahead of estimates.   Currency fluctuations boosted gross profit by 2 percentage points, to 48% of sales, while selling, general and administrative costs rose slower than sales, at just 5%.
Short Energizer in fund; no personal position

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